ZIMBABWE DIAMONDS POSITION STATEMENT

Jewelers of America is fully committed to the responsible sourcing of diamonds.

We are deeply concerned about alleged human rights abuses in the Marange region of Zimbabwe, as well as the impact of legal issues surrounding diamond production from this region.

In November 2011, the Kimberley Process (KP) agreed to allow the export of diamonds from Marange. Jewelers of America believed the KP was at risk of collapse if it did not resolve the impasse around the exportation of these goods.

The agreement on Marange will keep important controls in place that protect the global industry from conflict diamonds, while establishing conditions for approval of further exports, thereby clearing the way for the KP to undertake institutional reforms that will better enable it to discharge its mission in the future.

However, it presents a unique challenge for U.S. companies and those who do business with them, as well as the U.S.-based offices of foreign companies. This is because the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) enforces legal sanctions that prohibit all dealings, both directly and through third-parties, with the Zimbabwean entities that own or control the Marange region diamond mines and the diamonds exported by these entities.

As a result, Jewelers of America advises members to exercise appropriate due diligence with business partners, including taking additional precautionary measures for inventory protection in order to ensure compliance with U.S. law and maintain consumer confidence in diamonds. Specifically, Jewelers of America members should continue to require their suppliers to provide additional written reassurances, beyond the World Diamond Council’s (WDC) System of Warranties statement, that the diamonds they supply have not been obtained in violation of applicable national laws and/or sanctions and have not originated from Marange, Zimbabwe.

Jewelers of America is also working with other industry stakeholders, including the Diamond Manufacturers & Importers Association of America (DMIA), to ensure the U.S. industry is prepared to deal with issues that may arise if the KP proves unable to address them. The goal is to develop a more systematic approach for protecting the U.S. diamond and jewelry industry in order to shore up areas that remain beyond the scope of the KP.

Jewelers of America is encouraged by the appointment of the U.S. government as KP Chair for 2012.

Jewelers of America, led by President & CEO Matthew A. Runci, offers its full support to help the KP make further progress toward reforms that include: better internal controls to monitor KP Participants, the expansion of the KP mandate to include the prohibition of any form of human rights violations in connection with diamond mining, the establishment of a permanent Secretariat and an arbitration and conciliation dispute system.

The KP remains the foundation for the exclusion of conflict diamonds from the worldwide marketplace. JA will continue to push for improvements that will strengthen the diamond and jewelry supply chain and protect consumer confidence.